Correlation Between Plexus Corp and Nextera Energy
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Nextera Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Plexus Corp and Nextera Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Nextera Energy, you can compare the effects of market volatilities on Plexus Corp and Nextera Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Plexus Corp with a short position of Nextera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Nextera Energy.
Diversification Opportunities for Plexus Corp and Nextera Energy
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Plexus and Nextera is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Nextera Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextera Energy and Plexus Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Plexus Corp are associated (or correlated) with Nextera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextera Energy has no effect on the direction of Plexus Corp i.e., Plexus Corp and Nextera Energy go up and down completely randomly.
Pair Corralation between Plexus Corp and Nextera Energy
Given the investment horizon of 90 days Plexus Corp is expected to generate 0.92 times more return on investment than Nextera Energy. However, Plexus Corp is 1.08 times less risky than Nextera Energy. It trades about -0.02 of its potential returns per unit of risk. Nextera Energy is currently generating about -0.22 per unit of risk. If you would invest 16,139 in Plexus Corp on September 25, 2024 and sell it today you would lose (113.00) from holding Plexus Corp or give up 0.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 95.24% |
Values | Daily Returns |
Plexus Corp vs. Nextera Energy
Performance |
Timeline |
Plexus Corp |
Nextera Energy |
Plexus Corp and Nextera Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Plexus Corp and Nextera Energy
The main advantage of trading using opposite Plexus Corp and Nextera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Nextera Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nextera Energy will offset losses from the drop in Nextera Energy's long position.Plexus Corp vs. Rigetti Computing | Plexus Corp vs. Quantum Computing | Plexus Corp vs. IONQ Inc | Plexus Corp vs. Quantum |
Nextera Energy vs. Kaltura | Nextera Energy vs. MI Homes | Nextera Energy vs. Bassett Furniture Industries | Nextera Energy vs. JBG SMITH Properties |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Commodity Directory Find actively traded commodities issued by global exchanges |